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Energy Economics in China’s Policy-Making Plan Chapter j 17 343

FIGURE 17.3 China’s ongoing and future policies connected with energy concerns. Courtesy
Pew Charitable Trusts, 2010. Who’s winning the clean energy race? In G-20 Clean Energy Fact
Book. The Pew Charitable Trusts, Washington, p. 7

one of China’s key government institutions, the Development and Reform
Commission. Some examples of China’s successes can be seen in communities
that are becoming sustainable (Wang and Li, 2009; Kwan, 2009).
Through the legal framework stipulated in the new laws, the Chinese
government has set efficiency goals and imposed taxes and regulations
designed to curb demand and reduce emissions of greenhouse gases. In
addition, the government energy and environment institutions are imposed
with defined guidelines and responsibilities. The new policy toward alternative
energy is supported by financial incentives including direct subsidies and
innovative policy measures, tax-related incentives, custom duties, and pricing
8
incentives. Some concrete policy incentives are: (1) connecting “intermittent”
sources of electricity like wind or solar to the national grid; (2) connecting
utilities mandated to open transmission lines to renewable generators, with
ratepayers bearing part of the extra costs; (3) feed-in tariffs guaranteeing
renewable energy producers a steady, high price for electricity so as to enable
them to compete with coal producers; as well as (4) tax breaks, preferential
loans, and other financial incentives encouraging investors to support
renewable ventures (China FAQs, 2010).
China, however, has focused its efforts in the 11th Five-Year Plan to grow
the renewable energy sector primarily for export. As is pointed out by Lo (2011)
for the 12th Five-Year Plan and SGCC’s report on the 11th Five-Year Plan: “The
strategy of building a world-leading strong and smart grid with ultra-high
voltage grid as its backbone and subordinated at various voltage levels
featured as being IT-based, automated, interactive, based on independent

8. It refers to energy generation installations, which are not state-owned.